Taxpayers commonly name trusts as beneficiaries of their individual retirement accounts. If the trust is properly drafted, it will qualify as a designated beneficiary under Internal Revenue Code Section 401(a)(9), making it possible to stretch payouts over the life expectancy of the oldest trust beneficiary to maximize tax deferral. If the trust isn't properly drafted, however, the IRA will have no designated beneficiary and will have to be paid out over the decedent's ghost life expectancy
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